Mid-week data out of the U.K. confirms the construction sector continues to grow, but the headline figure released by IHS Markit and the CIPS disappointed at expectations.
Construction PMI for December read at 52.2, where analysts had forecast a reading of 52.8.
Looking at price action it is apparent that the impact on Sterling was largely negligible, which is to be expected as the construction sector accounts for a relatively small portion of the U.K. economy.
IHS Markit and the CIPS report a robust rise in residential building but this contrasted with falling work on commercial projects and stagnating civil engineering output.
Furthermore, there were positive signals for the near-term business outlook, with new order growth reaching a seven-month high and job creation the strongest since June.
Anecdotal evidence cited an improved flow of enquires in recent months, alongside a gradual upturn in clients’ willingness to commit to new work.
The prospect of greater workloads ahead resulted in stronger rises in employment and purchasing activity during December.
“It appears that the continued fall in commercial activity was testament to Brexit-related uncertainty on the horizon and the sector’s fear about the
direction of the UK economy as clients still hesitated to spend on bigger projects," says Duncan Brock, Director of Customer Relationships at the Chartered Institute of Procurement & Supply.